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SFHSS approves January 2021 addendum allowing dependent‑care FSA carryover and mid‑year changes
Summary
The board approved an addendum to the 2021 member rules and Section 125 cafeteria plan (in response to H.R. 133) to permit prospective mid‑year dependent‑care FSA election changes, limited eligibility extensions for 2020 dependents, and carryover of unused 2020 dependent‑care FSA balances into 2021.
Mitchell Griggs presented an addendum to the SFHSS 2021 member rules and Section 125 cafeteria plan reflecting provisions in the Consolidated Appropriations Act (H.R. 133) enacted in late December 2020. The proposed changes apply only to dependent‑care flexible‑spending accounts (FSAs) and would:
• Allow participants to make prospective changes to dependent‑care FSA elections during the 2021 plan year (revokes, new elections, increases or decreases) effective going forward from the change date; • Provide a limited age‑extension for dependents who aged out in 2020 (so certain expenses incurred in 2020 remain eligible under the 2020 plan rules); • Permit participants to carry over unused dependent‑care FSA balances from 2020 into the 2021 plan year (up to the amounts specified by the law and plan language).
Griggs noted that employers are not required to adopt these options but that SFHSS is proposing them to avoid members losing unused dependent‑care dollars and to give flexibility to employees whose child‑care arrangements changed during the pandemic. Board members described the carryover provision as important for members who previously lost money due to rigid FSA rules.
Commissioner Scott moved to approve the three recommendations; the motion was seconded, public comment was closed with no callers, and the board voted unanimously to adopt the addendum. The newly approved addendum will be posted with the member rules on the SFHSS website.
